New Zealand Interest Rate

The Reserve Bank of New Zealand left its official cash rate/OCR unchanged at a record low of 1.75 percent on 13th February 2019, as widely expected. Policymakers said that low interest rate support domestic economic growth and inflation, and highlighted that the tailwind from a slowing global economy may reduce demand for New Zealand's exports. The Committee noted that the inflation rate is near the 2 percent target rate, mostly due to cost of petrol and to keep inflation close to target, the economy needs continued support from monetary policy. Policymakers added that rates will remain at this level through 2019 and 2020 and that the direction of the next move could be up or down. Interest Rate in New Zealand averaged 7.36 percent from 1985 until 2018, reaching an all time high of 67.32 percent in March of 1985 and a record low of 1.75 percent in November of 2016.

Interest Rate in New Zealand is expected to be 1.75 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in New Zealand to stand at 1.75 in 12 months time. In the long-term, the New Zealand Interest Rate is projected to trend around 3.25 percent in 2020, according to our econometric models.

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New Zealand Holds Rates at Record Low of 1.75%

The Reserve Bank of New Zealand left its official cash rate/OCR unchanged at a record low of 1.75 percent on 13th February 2019, as widely expected. Policymakers said that low interest rate support domestic economic growth and inflation, and highlighted that the tailwind from a slowing global economy may reduce demand for New Zealand's exports. The Committee noted that the inflation rate is near the 2 percent target rate, mostly due to cost of petrol and to keep inflation close to target, the economy needs continued support from monetary policy. Policymakers added that rates will remain at this level through 2019 and 2020 and that the direction of the next move could be up or down.

Statement by the Central Bank of New Zealand:

The Official Cash Rate (OCR) remains at 1.75 percent. We expect to keep the OCR at this level through 2019 and 2020. The direction of our next OCR move could be up or down.

Trading-partner growth is expected to further moderate in 2019 and global commodity prices have already softened, reducing the tailwind that New Zealand economic activity has benefited from. The risk of a sharper downturn in trading-partner growth has also heightened over recent months.

Despite the weaker global impetus, we expect low interest rates and government spending to support a pick-up in New Zealand’s GDP growth over 2019. Low interest rates, and continued employment growth, should support household spending and business investment. Government spending on infrastructure and housing also supports domestic demand.

As capacity pressures build, consumer price inflation is expected to rise to around the mid-point of our target range at 2 percent.

There are upside and downside risks to this outlook. A more pronounced global downturn could weigh on domestic demand, but inflation could rise faster if firms pass on cost increases to prices to a greater extent.

We will keep the OCR at an expansionary level for a considerable period to contribute to maximising sustainable employment, and maintaining low and stable inflation.

RBNZ l Rida Husna | rida@tradingeconomics.com2/13/2019 4:12:59 AM

News

New Zealand Leaves Interest Rate at 1.75%
The interest rate in New Zealand was kept unchanged at 1.75 percent on 7 November 2018. The bank underscored that it expects to keep the OCR at this level through 2019 and into 2020, expecting GDP growth to pick up over 2019 and pointing to trade tensions as significant risk for sentiment. Consumer prices increased 1.9 percent year-on-year in the third quarter of 2018 following a 1.5 percent increase in the previous quarter. The print came above consensus expectations (1.7 percent) and was the highest rate in four quarters. Published on 2018-11-07

New Zealand Holds Interest Rate at 1.75%
The Reserve Bank of New Zealand left its official cash rate unchanged at record low of 1.75 percent on 26 September 2018, saying that economic projections were little changed since the last meeting, as while GDP growth in the second quarter was stronger than anticipated, downside risks to the growth outlook remain. Also, policymakers underscored that rates will remain at this level through 2019 and into 2020 and that the next move could be up or down. The central bank last moved the key rate in November of 2016.Published on 2018-09-26

New Zealand Leaves Interest Rate Unchanged at 1.75%
The Reserve Bank of New Zealand left its official cash rate unchanged at record low of 1.75 percent on August 8th, saying economic growth has moderated while inflation is likely to increase in the near term due to higher fuel prices and a lower exchange rate. Also, policymakers underscored that rates will remain at this level through 2019 and into 2020. The central bank last moved the key rate in November of 2016.Published on 2018-08-08

New Zealand Leaves Interest Rate Unchanged at 1.75%
The Reserve Bank of New Zealand kept its official cash rate unchanged at record low of 1.75 percent on 27 June 2018, as widely expected. The central bank last moved the key rate in November of 2016. Policymakers underscored that the outlook for the economy remains intact and that CPI inflation is likely to increase in the near term due to higher fuel prices. Consumer prices in New Zealand increased 1.1 percent year-on-year in the first three months of 2018 following a 1.6 percent increase in the previous quarter, matching market expectations. It was the slowest inflation since the third quarter of 2016.Published on 2018-06-27

New Zealand Interest Rate

In New Zealand, interest rates decisions are taken by the Reserve Bank of New Zealand. The official interest rate is the Official Cash Rate (OCR). The OCR was introduced in March 1999 and is reviewed eight times a year by the Bank. The OCR influences the price of borrowing money in New Zealand and provides the Reserve Bank with a means of influencing the level of economic activity and inflation. This page provides - New Zealand Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. New Zealand Interest Rate - actual data, historical chart and calendar of releases - was last updated on March of 2019.